President Donald Trump has imposed a 25% tariff on goods imported from Japan and South Korea, citing persistent trade imbalances.
Mr. Trump announced the tariffs, set to begin on August 1, via letters posted on Truth Social addressed to the leaders of both nations.
The letters cautioned Japan and South Korea against retaliatory tariff increases, warning of further tariff hikes from the Trump administration.
“If for any reason you decide to raise your tariffs, then, whatever the number you choose to raise them by, will be added onto the 25% that we charge,” Mr. Trump stated in the letters to Japanese Prime Minister Shigeru Ishiba and South Korean President Lee Jae-myung.
These letters continue a pattern of Mr. Trump positioning himself at the center of a global economic drama surrounding tariffs and trade.
Mr. Trump declared an economic emergency to unilaterally impose the taxes, framing them as remedies for past trade deficits despite the popularity of Japanese and South Korean cars, electronics, and other goods among US consumers.
Analysts question the strategic benefit of challenging key Asian partners who could help counter China’s economic influence, especially considering China is a stated reason for the tariffs.
“These tariffs may be modified, upward or downward, depending on our relationship with your country,” Mr. Trump reiterated in both letters.
The implementation date of the tariffs, roughly three weeks away, creates a window for potentially tense negotiations between the US and its trading partners aimed at establishing new trade frameworks.
Mr. Trump’s initial announcement of tariffs on numerous countries, including 24% on Japan and 25% on South Korea, initially triggered financial market instability. He then initiated a 90-day negotiation period, applying a baseline 10% tariff to goods from most countries to stabilize the markets.
Although that 90-day negotiation period technically ends before Wednesday, administration officials and Mr. Trump have described the three-week period preceding tariff implementation as an extension for further talks.
The administration plans to use tariff revenue to partially offset the tax cuts enacted on July 4, which could disproportionately shift the federal tax burden onto the middle class and lower-income individuals as importers pass on the tariff costs.
The trade agreement with Vietnam appears designed to prevent China from circumventing tariffs by routing goods through that country. Furthermore, the quotas within the agreement with the United Kingdom would exempt them from the higher steel, aluminum, and auto tariffs.
According to the Census Bureau, the United States had a $69.4 billion trade deficit in goods with Japan in 2024 and a $66 billion deficit with South Korea.
